Studies have proven that companies which market throughout a downturn are better positioned to survive a recession and thrive as economic recovery resumes. However, businesses fighting for survival are often not afforded the luxury of long-term thinking and come under pressure to take decisions which produce immediate results.
I spoke with Hannah Darby, a Customer & Marketing Director who has experience of working for well-known service providers at different stages of maturity. Hannah has worked for companies during periods of rapid customer acquisition and revenue growth including Good Energy and Shell Energy (previously First Utility) as well as established brands in saturated markets like The RAC and KCom which face pressure to deliver returns to their private equity owners. Hannah and I discussed how marketers are constantly balancing being strategic with being tactical and how a shift in consumer behaviour is favouring digitally first businesses.
Survival is top of the list
Marketers will tell you that their budget or team is no longer the first thing to be cut during difficult times, however when all expenditure is being scrutinised, it’s essential that they understand where to prioritise. “Many companies have had a massive wake-up call around digital maturity, realising what they had in place may not be as effective as they thought and immediately, they’ve been exposed for not having the right tools in place” explained Hannah. “the ability to have online transaction tools, the right distribution model and an engaged social media community, can make a significant difference”.
When it comes to differences, customer-experience is often touted as the cure-all remedy for an unhealthy cost to serve as well as aiding customer acquisition and retention. If you’re facing budgetary constraints, addressing CX doesn’t necessarily mean you need to invest millions in over sophisticated content management systems or the overall architecture, but it does mean walking through the journey and experiencing it like a customer does. By seeing it through their eyes, you can uncover the blockers and pinch points, uncovering the moment of truth where you realise what must be changed. “Consumers are savvy and, as the digitally native millennial segment is rising up the ranks at work (and increasing their earning and spending power), they do have certain expectations on what they’re prepared to accept in terms of response times, functionality, access to information and ease of use”. Hannah explained that companies often make the mistake of addressing the digital experience as an isolated problem, rather than see it as a combined problem of skill set, technology and investment.
Insights are more critical than ever
This led us to discussing how the Marketing Director role will evolve. “To some extent, it’s already changed” said Hannah. The pace at which data is accumulated and analysed across multiple channels and touchpoints means that marketers must understand how to draw out the insights and make them actionable. The Chief Data role is often about management and Governance, whereas the marketer’s role is to get to the heart of the customer appetite and need. When overlaid onto the macro factors which are impacting purchasing behaviour, data can reveal that an established company or product may no longer be relevant to its rapidly evolving audience and help to define a new operating model. “What’s interesting is that smaller, more agile businesses are often making better use of their data than larger players”.
Most service businesses have been built around products and propositions rather than consumer behaviour and COVID has escalated the way in which consumers expect to access those services. In companies where marketing takes a front seat, decisions are based on data and insights which in turn influence the technology and the operations roadmap. These are the companies that are much more likely to survive and prosper following the aftermath of COVID.
Adapting to behavioural change
I was intrigued to see if Hannah thought consumer behaviour would change, particularly having read reports which polarise whether we’ll stop spending or return to our previous patterns of consumption. Hannah referred to Kantar’s research report which highlights the differences between the ‘haves’ and the ‘have nots’, referring to increased levels of saving in upper middle-class households compared to lower income households where jobs are being lost due to working in sectors impacted by COVID.
“Consumerism is hard-wired, so it’s likely that it won’t change. The question, however, is whether we return to our casual spending habits or make more considered purchases, and this applies to essential services like energy and financial services.” Regardless of your financial position, all purchases will be scrutinised and there’s every possibility that consumers will only want to associate with brands they trust. This will be impacted by how consumers perceive brands have behaved and treated them during this period. In turn, this brought us back to our starting point - marketers having to be focused on the long-term strategy of brand building and gaining trust, while balancing the immediate need to deliver financial wins.
Hannah’s comments echo what we’re hearing from across the service sector. Many large companies have found they are not as digitally mature as they first thought. The current climate has meant businesses and customers have very quickly had to get used to using different channels. Whilst customers are more understanding, this empathy will not continue if they feel that brands are not listening to them or taking advantage. Moving forward, we expect to see an increase for marketers who understand how to use their data to forge even closer relationships with their audience and importantly, apply this with integrity and build trust.